Financing your new home is a big deal. If done properly, it can be pretty uneventful, but if you're not careful, there are some pitfalls lurking out there. Fortunately, there are steps you can take to minimize your risk of issues. First, if your down payment consists of any cash that you have accumulated not in a bank - known as "shoebox money" or "mattress money" - you should make sure it is in your bank account at least 60 days before the closing. It's important that you have a paper trail for your money so that you can prove that it didn't come from either the Realtor or the seller.
When depositing this money, be aware that the Federal Government, via our friends at the IRS, requires any bank to report cash deposits of $10,000 or more as a possible tip off to money laundering.
You should also be aware that there can be unforeseeable issues with the title that don't reveal themselves until the title search is done as part of the closing process. There can be potential issues with tax liens or multiple mortgages that were not disclosed during other parts of the transactions. Sometimes these issues can delay a closing and other times prevent it from happening all together.
Another issue is the home appraisal. For both they buyer and the banks protection, an appraisal is done to insure that the appraisal price is in line with the selling price or amount financed. Since we have been in a market where prices are rising, when an appraisal is done and comparative analysis is done, the appraiser must do it with older transactions which can be at lower prices. This can create a lag while current values wait for past values to catch up.
Finally, there are some things you shouldn't do, as a buyer, prior to closing on your loan:
1. Don't buy a new care
2. Don't buy appliances
3. Don't open new credit
4. Don't quit your job
All of these actions send up a red flag to the lender and cause them to have to reevaluate your loan in light of these new obligations. It's best to be patient and wait until after the closing before taking any of the above actions.
By staying aware of what possible things can go wrong, you can make sure that you have a smooth transaction.
To search for homes, visit: http://homesearch.toledoareahomes.com...
Kelley Knitz has been a RE/MAX agent for over 26 years and is in the RE/MAX Hall of Fame and is a long time member of the Toledo Board of Realtors Million Dollar Club.